APRA releases report on industry self-assessments into governance, culture and accountability
The Australian Prudential Regulation Authority (APRA) has released a report analysing the self-assessments carried out by 36 of the country’s largest banks, insurers and superannuation licensees.
The report was in response to the Final Report of the Prudential Inquiry into Commonwealth Bank of Australia (CBA), and outcomes from the Financial Services Royal Commission earlier in the year, after it was apparent the problems at CBA also occurred at other big financial businesses.
“APRA noted a wide variation in the quality of the self-assessments; most institutions recognised the opportunity provided by the findings in the Final Report to critically examine their own organisation , however a small number of institutions took a lighter touch approach and viewed it as an exercise for APRA rather than an opportunity to drive improvement.”
“It was not always evident that institutions clearly understood the drivers of their findings. Therefore, there is a risk that any planned action to address weaknesses may not be effective or sustainable,” said APRA Deputy Chair, John Lonsdale.
Consistent findings in the self-assessments included:
- non-financial risk management requires improvement;
- accountabilities are not always clear, cascaded and effectively enforced;
- acknowledged weaknesses are well-known and some have been long-standing; and
- risk culture is not well understood, and therefore may not be reinforcing the desired behaviours.
A copy of the publication is available on the APRA website at www.apra.gov.au/information-papers-released-apra.
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